A Quarter Century of Changes in Labor Force Participation

This paper examines the changes in the determinants of labor force participation over time, using the Egypt Labor Market Panel Survey (ELMPS) for the years 1998, 2006 and 2012. Controlling for individual and household characteristics, a multinomial logit model is estimated to analyze the determinants of participation by status and sector of employment. The empirical results show that the effect of parental education on the individual’s decision of employment has weakened if not disappeared over time but the effect of the individual’s own education has increased. For instance, in 2012, fathers’ education has no effect on females’ or males’ employment decisions as used to be the case in 1998 and 2006. This result confirms the decreasing role of background characteristics that are out of the individual’s control and the increasing role of the factors that individuals are able to change through their own decisions. According to Hendy (2015), female labor force participation in Egypt remains relatively low and has even decreased over the period from 2006 to 2012, confirming that the January 25th revolution has had a negative effect on women’s status in the labor market. This is also confirmed in the present paper. The results of the multinomial logit model show that women have lower probability of employment in all sectors (government and private) relative to their males counterparts.